Pakistan Ordnance Factories facing financial crisis

[sonicboom]

$250 million recommended for POF overhaul

Published: March 10, 2010


ISLAMABAD (APP) - National Assembly Standing Committee on Defence Production Tuesday recommended injecting a grant of US $250 million to the country’s mother defence industry - Pakistan Ordinance Factories (POF) - to overhaul her aging production units.
The call came soon after the committee members, headed by Sheikh Aftab Ahmed, had a day-long visit to the POF during which POF Chairman Lt Gen Shujaat Zamir Dar briefed them about the complex.

The committee was of the unanimous view that the government should make necessary arrangements for providing funds to the essential sectors like defence and defence production. Terming POF the lifeline for the country’s defence, it vowed to make every effort to help meeting the challenges faced by the complex. The visiting MNAs were informed that US $250m were needed for overhauling and revamping the machinery of various units in two three phases.

During the question-answer session, the POF chairman said despite all the odds, POF was able to fulfil Pakistan’s defence requirements. He also expressed his concerns over steep rise in inflation and power tariffs on which committee suggested to take immediate steps on war-footings.

Later, Sheikh Aftab told a selected group of journalists that the issues pertaining to the POF needed to be immediate attention to make it not only a financially viable institution but also ensuring that it was continued production for the armed forces.

He said the committee would also recommend granting the POF an autonomous status as envisaged in the 1961 Ordnance of the factory. He also appreciated the role played by the govt terming it as heroic one.

Other committee members including Mrs Fouzia Ejaz Khan, Muzaffarul Mulk, Sher Muhammad Baloch, Nazeer Bhutta, Akhunzada Chitan and Moazzam Ali Khan Jatoi also accompanied Sheikh Aftab Ahmed.


$250 million recommended for POF overhaul | Pakistan | News | Newspaper | Daily | English | Online

 

[Sinnerman108]

POF is a very capable organization run by incompetent fools! Like PIA, its overstaffed in the thousands, it has no drawn out international marketing strategy, its lousy at marketing techniques & to top it off its headed by a Army general who is least competent in marketing techniques of arms and ammunition. This is bound to happen with such organizations until such time they are privatized and allowed to be run by professionals. POF is not the only organization to share such fate in Pakistan. All state-run weapons factories are essentially under the same cloud.

nothing could be more true.
I have personally been a witness to the absolute incompetence, arrogance and sheer stubbornness.

However, Please do comment on the fate of Pakistan Army which is run by the same "managers".

I am not trying to malign the generals for no reason, I just want to know why is it that through out the training and learning career a general fails to

1. Handle human resource problems.
2. be a negotiator and conflict resolver
3. be far sighted
4. understand or improve work processes ?

Shouldn't this be implemented as training in an officer's career ?
and if an officer can not do this, than how is he different form a soldier professionally ?

 

[TaimiKhan]

nothing could be more true.
I have personally been a witness to the absolute incompetence, arrogance and sheer stubbornness.

However, Please do comment on the fate of Pakistan Army which is run by the same "managers".

I am not trying to malign the generals for no reason, I just want to know why is it that through out the training and learning career a general fails to

1. Handle human resource problems.
2. be a negotiator and conflict resolver
3. be far sighted
4. understand or improve work processes ?

Shouldn't this be implemented as training in an officer's career ?
and if an officer can not do this, than how is he different form a soldier professionally ?

Organizations & Human Being dislike and resist change. Human psyche.

Similarly, Our officers and officers of many militarizes resist change.

For us, we need a single or some revolutionary kind of senior brass, which can bring in change and do the things which you said above to be done.

By the way military officers are very good at running things when given to them, but problem is they are not some marketing managers, or brand managers or finance managers or the type of things we see in our corporate world.

Its not a part of the curriculum, nor are they taught that during their career.

So such jobs are the work of men who are trained in them and have knowledge of it, as such organizations keep evolving and keep changing.

I work in a bank and i have seen and experienced how organizations react to change and don't let it happen. My organization is of a few thousand men & women and Army is of hundred thousands of men & women.

But we need to bring in some forward thinking in our soldiers, little change in the way how officers think should be brought in. brain storming kind of things, promoting initiatives and appreciation has to be brought in. Without appreciation, officers won't come up with ideas.

 

[Sinnerman108]

Organizations & Human Being dislike and resist change. Human psyche.

Similarly, Our officers and officers of many militarizes resist change.

For us, we need a single or some revolutionary kind of senior brass, which can bring in change and do the things which you said above to be done.

By the way military officers are very good at running things when given to them, but problem is they are not some marketing managers, or brand managers or finance managers or the type of things we see in our corporate world.

Its not a part of the curriculum, nor are they taught that during their career.

So such jobs are the work of men who are trained in them and have knowledge of it, as such organizations keep evolving and keep changing.

I work in a bank and i have seen and experienced how organizations react to change and don't let it happen. My organization is of a few thousand men & women and Army is of hundred thousands of men & women.

But we need to bring in some forward thinking in our soldiers, little change in the way how officers think should be brought in. brain storming kind of things, promoting initiatives and appreciation has to be brought in. Without appreciation, officers won't come up with ideas.

Taimi,

Really man ! come on ! your post sounded like you are trying to defend the lack of excellence at POF !

Resist change ... every one resists change, human or not, it's inertia.

But we need to bring in some forward thinking in our soldiers, little change in the way how officers think should be brought in. brain storming kind of things, promoting initiatives and appreciation has to be brought in. Without appreciation, officers won't come up with ideas

That was my whole point, we should think about new management techniques, impart a learning and thinking process.
We should encourage innovation, and appreciate quality.

We should also do a RCA ( Root cause Analysis) on why officers not capable of management grades, officers who are unable to think out of the box, and officers who are less than improvisers and survives raise to the rank of a general.

I for once would like that seat to be reserved for an exceptional man as long as I am paying for his salary.

 

[fatman17]

BUSINESS
Date Posted: 11-Mar-2010

Jane's Defence Weekly

Pakistan Ordnance Factories requests $250m to meet production backlog

Jon Grevatt Jane's Asia-Pacific Industry Reporter - Bangkok

Key Points
Pakistan Ordnance Factories has requested a grant of USD250 million for modernisation

The state-owned production group has turned away production orders worth USD500 million


State-owned Pakistan Ordnance Factories (POF) has requested a government grant of USD250 million to modernise its ageing facilities and help meet a growing production backlog, Jane's has learnt.

The POF made the recommendation to the National Assembly's Standing Committee on Defence and Defence Production on 9 March, and stated that outdated manufacturing processes have so far caused the company to turn away production orders worth around USD500 million.

Lieutenant General Javed Ashraf, chairman of the committee, told Jane's on 10 March that the money is needed quickly.

"A lot of the POF's plants are ageing and they need to be replaced," he said. "The POF has requested this money based on an estimate that they put forward to the defence committee.

"We don't know yet whether the money will be made available to the POF but it has certainly been recommended [by the committee]. Even if the funds are made available in instalments over five years or 10 years - whatever the government can afford - the fact remains that the POF plants need to be replaced."

Lt Gen Ashraf said that the low production rate of the POF's present facilities meant that the company has not been able to meet contractual deadlines and has had to refuse other work.

"The POF has orders that it is not able to meet as per the deadlines given," he said. "It is also having to refuse orders, otherwise they will not be able to meet the deadlines. These confirmed orders are worth almost USD500 million.

"The POF is unable to take these orders because the present production facilities are very slow - a lot of these facilities are still manual. If they are replaced, the process would be much more automatic and the whole process would be speeded up."

Lt Gen Ashraf added: "The POF wants this modernisation because it knows it has to catch up with other competitors in the world."

Officials from the POF were not contactable for comment on 10 March, although the company's chairman Lieutenant General Shujaat Zameer Dar was quoted by Pakistani media as saying that 60 per cent of the company's machinery was more than 30 years old and that a "substantial" amount of money was needed to render the POF efficient.

Pakistan has, in recent years, signed cross-border agreements with both Brunei and Jordan with a view to exploring investment opportunities in the defence industrial domains.

The POF, which posted revenues of USD500 million in 2008, is the preferred supplier of land systems for the Pakistan armed forces. It specialises in the production of automatic rifles, machine guns, mortar and artillery ammunition, aircraft and anti-aircraft ammunition, tank and anti-tank ammunition and explosives.

The company also has a growing list of export customers, including countries located in Southeast Asia, Africa, the Middle East and Latin America.

 

[TaimiKhan]

Taimi,

Really man ! come on ! your post sounded like you are trying to defend the lack of excellence at POF !

Resist change ... every one resists change, human or not, it's inertia.




That was my whole point, we should think about new management techniques, impart a learning and thinking process.
We should encourage innovation, and appreciate quality.

We should also do a RCA ( Root cause Analysis) on why officers not capable of management grades, officers who are unable to think out of the box, and officers who are less than improvisers and survives raise to the rank of a general.

I for once would like that seat to be reserved for an exceptional man as long as I am paying for his salary.

Ooo nahi yaar, am not defending POF. I told you the reasons for their poor results, the same ones which you outlined above and i also gave you the suggestions to how to think out of the box and bring a change.

I just pointed out that it is a typical govt organization which resists change and don't want it.

And we need change in it.

Even if the chairman is a Lt Gen, there should be a MD or CEO kind of a post, given to a private individual with defence related marketing ties and should run the show. The Chairman should see to the overall mgt thing as under him everything in Wah comes. POF should be run by a dedicated expert with expertise in defence marketing and also a team, their suggestions should be implemented to the maximum and they should do the marketing and selling stuff.

This isn't the work of Army officers, that is for private expert individuals to run.

 

[NWO]

Just privatize the whole thing. This is what you get if you allow government to interfere.

 

[mjnaushad]

Why the hell is everybody saying Privatize it Privatize it. The same army and same govt managed it to world class standards for more than 30 years. Every company have some difficulties. It does not mean that the first thing we think is Privatize it. Privatization is not solution to everything.

 

[Sinnerman108]

Why the hell is everybody saying Privatize it Privatize it. The same army and same govt managed it to world class standards for more than 30 years. Every company have some difficulties. It does not mean that the first thing we think is Privatize it. Privatization is not solution to everything.

Would you like to qualify your remarks please ?

unless your world is size of Wah / Taxila ... I don't see how you can substantiate your claim.

 

[sparklingway]

No need to privatize it but operational structure can be changed to allow for greater freedom in exploiting markets for the POF. Running entirely under the army can yield the required production for the domestic market but would hardly ever allow it to become an international competitor. Becoming and international competitor requires more than producing quality products. Structural adjustments and reorganization can be achieved without privatizing it and keeping it mainly focused on fulfilling domestic needs.

 

[fatman17]

Chinese loan for Heavy Mechanical Complex

Thursday, April 29, 2010

By Aftab Maken

ISLAMABAD: The Industries and Production Ministry has sought approval of the prime minister for a Chinese concessional multibillion loan for Balancing, Modernisation, Revamping and Expansion (BMRE) of the state-owned Heavy Mechanical Complex, Taxila, according to a summary of the ministry on Wednesday.

The ministry in its proposal has further sought the Prime Minister Secretariat’s nod for initiating a request for concessional project financing by the Chinese government through the Economic Affairs Division (EAD) for BMRE, costing Rs23.428 billion, including foreign component of $173.17 million.

It has also sought a go ahead signal for negotiations with the Chinese companies for project design, technology and execution of the BMRE project to manufacture turbines and power plant equipment indigenously and making the country self-sufficient in energy needs, the summary said.

To meet serious challenges of the power deficit being faced by the country and to cope with the energy security plan of the Mid-Term Development Framework 2005 and Vision 2030, a PC-I for BMRE of Heavy Mechanical Complex to manufacture turbines and power plant equipment with a capital cost of Rs23.428 billion, including foreign component of $173.17 million has been submitted to the Planning Commission.

The Economic Affairs Division has also been requested for taking up the project financing with the Chinese government for inclusion in the projects to be financed in their five-year development programme. The Economic Affairs Division has sought approval of the competent authority to initiate concessional loan negotiations with the Chinese government.

Heavy Mechanical Complex (HMC) is a leading enterprise, manufacturing capital engineering goods under the administrative control of the Industries and Production Ministry.

Since its inception, HMC has made significant contributions to the industrial development. It has manufactured plant machinery and equipment for establishment and expansion of 57 sugar plants, 22 cement plants, besides providing equipment to other industrial sectors such as oil and gas, chemicals and petrochemicals, thermal, hydropower plants, heavy castings, forgings, etc.

HMC has also exported complete sugar plants and other equipment. It has also developed products for defence organisations. However, plant and machinery installed in the complex is now four decades old and due to continuous use, it has lost accuracy and requires excessive maintenance to keep it in operation, it added.